Uka Eje, chief executive officer at ThriveAgric, an agricultural technology company. In this interview with BUNMI BAILEY, he talks about its funding from the Central Bank of Nigeria (CBN)’s Development Finance Initiative and how it will help drive food security. Excerpts:
You recently raised $56.4m for your business, how did you achieve that?
Besides local commercial banks and our institutional investors, I would also say we achieved that feat with support from our partners and funders in different capacities; such as TAK Logistics, Value Seeds, Sterling Bank, and of course, the CBN through its development finance initiative. You see, for us, it is one thing to raise funding and it’s another to build a company that readily attracts that funding. This is why we appreciate and acknowledge the different categories of our stakeholders who have worked with us in one way or another, to grow Thrive Agric to where it is today.
You mentioned the CBN’s Development Finance Initiative, what made ThriveAgric qualify for the funding?
Among other objectives, this initiative is intended to create economic linkage between smallholder farmers and reputable large-scale processors like ThriveAgric, to increase agricultural output and significantly improve the capacity utilisation of processors. This covers the provision of farm inputs in kind and cash to smallholder farmers to boost the production of food commodities, stabilise input supply and address Nigeria’s negative balance of payments on food. Based on our passion to promote food security and the full potential of our agricultural sector, what we do at ThriveAgric is to link smallholder farmers to finance for farming inputs, data-driven best practices, and access to local and global markets for their commodities.
You can see the clear synergy between our goals at ThriveAgric and the objectives of the CBN’s development finance initiative, and that’s what qualified us for the funding alongside other applicable establishments. The CBN was looking to provide credit facilities to commercial agricultural enterprises, at a single-digit interest rate and we met the requirements necessary to be recipients of the funding.
How would you evaluate the Nigerian government’s agric initiatives?
The government is doing what it can for the agriculture sector, especially through the provision of intervention funds such as the CBN’s development finance initiatives. It is however also imperative to also ensure long-term commitment to a working set of policies and infrastructure for the agricultural sector, towards achieving sustainability.
Read also: CBN issues framework for open banking
Can you tell us how you plan to utilise the $56.4million debt funding you’ve raised?
With the funds in place, we are now another step closer to fulfilling our mission of building the largest network of profitable African farmers, using technology. Essentially, the raise will enable us to accelerate our work, grow our 200,000+ farmer base, and expand into new African markets including Ghana, Zambia, and Kenya.
How many farmers do you work with at the moment and how many new ones will be engaged with the funds?
Presently, we have a smallholder farmer base of about 250,000 across Nigeria. With the debt funding, we are looking to support and scale up to 500,000 this year.
How do you identify these farmers and support them?
At the beginning of every farming season, we go into viable communities and recruit interested, eligible, and creditworthy smallholder farmers. Then we collect their relevant data including image capture and map their farms using our offline Agent App, which runs on our proprietary technology; an Agricultural Operating System (AOS). With this information, we can calculate the required input financing needed to achieve maximum yield from the recorded farm sizes, and we make available the necessary funds through quality inputs, to commence farming. This includes improved seeds, special fertilizer blends, and crop protection products.
Once our farmers begin to plant, we monitor them throughout the season and provide needed training and insight, based on data-driven best practices around factors like irrigation, flooding, and more. When they harvest, we receive their commodities at industry premium prices and supply local and global off-takers. Through this out-grower model, we’ve seen our farmers achieve improved yields translating to about 80 percent increase in their incomes. Over the years, we’ve received testimonials of how these profits have upgraded their lives; some can expand and better provide for their families, pay their children’s school fees, get better means of transportation, and acquire more land for farming among others.
How do you position the farmers to continuously grow premium produce to attract premium prices?
For us at ThriveAgric, it boils down to the timeliness and quality of the farming input we provide our farmers. Farming is such a time-sensitive activity and every moment counts. So we’ve built an annual system aligned to the weather forecast and climate conditions of the areas we operate and ensure we promptly provide farm inputs to our farmers to begin planting in prime time. Based on the data we collect on our AOS, we also work with input providers to procure improved seeds and customised fertilizer blends to ensure the optimum harvest of premium produce. Our technology also enables us to project expected harvest sizes such that we can obtain supply agreements well ahead, at the best industry prices. Of course, year on year, we take lessons from previous seasons and continue to make process improvements, which also helps achieve the desired outcomes. We understand that the majority of smallholder farmers live below the poverty line, and this is one of the challenges we are helping to solve by assisting them to increase production and sales.
What impact have you seen on the farmers and Nigeria, in the past year?
We’re excited about the strong margin performance we were able to achieve in the number of farmers we support, based on a year-on-year increase of 277 percent in our numbers over 200,000 farmers were on board via our AOS in 2021, compared to 53,000 in 2020. For us, this means more impact. As I’ve already mentioned, we’ve seen the direct socioeconomic value to these farmers including training & development, increased earnings, and improved mental, physical & financial wellbeing. There’s also a positive ripple effect that results in community/youth empowerment through the jobs we create as well as the social and financial inclusion that comes to them through our activities and digital payment process. Ultimately, the big picture for Thrive Agric is that we are effectively building a sustainable structure for more commercial than subsistence farming, which unlocks Nigeria’s food production potential, promotes economic growth, and ensures food security for us & countries beyond. So far, we’ve produced and traded 400,000+ metric tons of grains and staple foods such as maize, rice, sorghum, and wheat, and this year, we’re working to scale that number to two million. In many ways, this is about putting food on our tables and changing the general narrative coming out of Nigeria and Africa.
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